Stocks on Bursa Malaysia ended broadly lower yesterday with the benchmark index staying in the negative region amid continued profit-taking in heavyweights, there were however buying interest in some lower liners and plantation stocks despite the generally weak market sentiment, as investors were reluctant to take any long positions and unwound ahead of the Hari Raya holidays starting on Friday. The FBM KLCI fell 0.41 point or 0.03% to 1434.27 on low volume. Market breadth was negative with decliners leading advancers by 354 to 336 while 286 counters were unchanged. Turnover was lower at 641 million shares worth RM1.172 billion from 743 million shares worth RM1.421 billion the day before.
The FBM KLCI opened 0.35 point lower and traded in a narrow range; it was fluctuating between the intra-day high of 1436.65 and the low of 1432.52, and was staying in the negative territory for most part of the day. Chart-wise, the key index formed a Doji candlestick which indicates consolidation and indecision of market direction. The index is now closing below the 5-day moving average (MA) which is at 1435.53; it is likely to exert some short term selling pressure on the key index and the index is likely to further correct downward. However, the 10-day MA at 1422 is likely to provide support to the key index.
MACD continued to curve down as shown by its shorter histogram, indicating a slow down in the upward momentum. RSI(14) at 77.4 continued to slide lower indicating a gradual loss in market strength, is still in the overbought zone, and might slide further downward. Stochastic at 90.3 is also sliding lower but still in the short term overbought zone. Signals from the indicators are indicating a loss in upward momentum of the key index, and it may transform into a downward momentum.
The underlying short, medium and long term uptrend of the FBM KLCI remained intact, with the immediate very short term 5-day trend starting to turn weak. Immediate downside support for the key index is at 1422 to 1431, while the overhead resistance zone is at 1437 to 1442.
As Bursa Malaysia will open for only half a day on Thursday, September 9, and close on Friday for Hari Raya celebration, the market is expected to remain quiet, and the benchmark index is likely to continue drifting or track the performance of regional indexes.
Overnight, the Dow fell -107.24 points or -1.03% to close at 10,340.69. Today, the FBM KLCI is likely to trade within a range of 1426 to 1441.
This week's expected range: 1389 – 1473
Today’s expected range: 1426 – 1441
Resistance: 1436, 1438, 1441
Support: 1426, 1430, 1432
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